* Financials rise as U.S. Congress mulls bailout
* Resources retreat as metal, oil prices ease
* Fairfax up on report it’s eyeing AIG assets (Adds details)
TORONTO, Sept 23 (Reuters) - The Toronto Stock Exchange’s main index was little changed on Tuesday morning as weaker commodity issues offset financials, which rose amid key congressional testimony on the $700 billion U.S. financial bailout plan.
The architects of the rescue plan, U.S. Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson, urged Congress on Tuesday to act quickly on the plan for the government to buy up billions of illiquid assets to stabilize U.S. financial markets. See [ID:nN13574113]
“They’re looking for reassurance that there is a credible plan and they’re in fact committed to getting this plan to the marketplace,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
“Any assurances that regulators, administrative officials in New York and Washington can give to their commitment to a successful outcome is going to move the market.”
Markets also digested the possible sale of Lehman Brothers Holdings Inc’s LEHMQ.PK European arm, seen as the next step in Wall Street’s makeover. See [ID:nLN230451]
In choppy morning activity, the S&P/TSX composite index .GSPTSE was up 13.12 points, or 0.1 percent, at 12,651.19, shortly before 11:30 a.m., after rising more than 100 points and bobbing into negative territory. Seven of its 10 main groups were higher.
The uptick comes after a 2 percent tumble on Monday, as worries over the effectiveness of the U.S. bailout plan sparked a selloff.
The heavily weighted financial sector rose 2.1 percent. Toronto-Dominion Bank (TD.TO) was up 0.9 percent at C$63.16 after reports that TD has joined other suitors for all or part of Washington Mutual Inc (WM.N). See [ID:nN23324475]
Fairfax Financial Holdings Ltd (FFH.TO), the top net gainer on the market, jumped 3.2 percent to C$330.31 after the Globe and Mail reported on Tuesday that Fairfax is looking into American International Group Inc’s (AIG.N) Canadian property and casualty operations, as well as some businesses in Europe where it’s currently mulling expansion.
Manulife Financial Corp MFC.TO and Sun Life Financial Inc (SLF.TO) are also scouring AIG’s businesses for potential acquisition opportunities, the newspaper said.
Elsewhere in financials, National Bank of Canada (NA.TO) Chief Executive Louis Vachon said the bank is looking to do additional deals in the wealth management area after making four such purchases this year and announcing a minority equity stake in a brokerage this week. See [ID:nN23369553] National Bank sipped 1.5 percent to C$50.94.
The heavyweight energy sector gave back earlier gains and dipped into the red, down 0.4 percent, as oil prices eased due to doubts over the U.S. financial bailout plan after a record one-day rise on Monday. See [ID:nSYD221917].
The resource-laden materials sector was down 3.1 percent, amid weakness in metal prices. See [ID:nLN408202]. First Quantum Minerals (FM.TO) fell 6.8 percent to C$46.15.
In economic news, falling gasoline costs provided some relief for Canadians in August, knocking down consumer prices for the first time since January. Inflation, however, stayed at a five-year high. See [ID:nN23361823]
$1=$1.03 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson